Friday 30 October 2009 08.00 EDT
First published on Friday 30 October 2009 08.00 EDT

Last week I announced the Conservative party's intention to give social housing tenants in the private rented sector the choice of whether their rent is paid to them or their landlords. The aim of this change is to increase the amount of private rented accommodation available to the most vulnerable tenants. That choice is currently being restricted by Labour's inflexibility in insisting that local housing allowance (LHA) can only be paid to the tenant and not the landlord. We believe that this is an urgent and necessary change, given that there are 1.8 million families on the social housing waiting list.

A recent survey by the homelessness charity Crisis found that 82% of respondents had noticed tenants falling behind on their rent since the introduction of LHA. The same number said that LHA was leading to more tenancies being terminated. More than two-thirds reported landlords "stipulating conditions over and above those requested for working tenants" while 38% said that fewer landlords will accept housing benefit recipients since the introduction the new system. Crisis warns:

These findings raise some major concerns about the way in which LHA currently operates. It appears that LHA may be working against the Government's fundamental aims for the scheme along with Government policy to prevent and reduce homelessness.

The reason that we have formed our policy is that we have received mounting evidence from across the country that tenants in receipt of housing benefit in the private rented sector, charities helping the homeless and landlords have all been disadvantaged by Labour's inflexibility in insisting that LHA be paid direct to the tenant. The result has been that arrears of rent have caused some landlords to stop offering properties to tenants on LHA, thus restricting the number of properties available. In one town in my constituency there are only two out of a large number of letting agents who will accept tenants in receipt of LHA.

Charities that rent private accommodation for the homeless have also lost out and landlords have lost rent, leading in some cases to the forced sale of properties as mortgages could not be covered. The Treasury has also lost out on the tax that landlords would have paid on the rent they never received.

When tenants were given this choice in the past around 60% chose to have their housing benefit paid direct to their landlords. Our announcement has been welcomed by many organisations including the Child Poverty Action Group. Please pass on our proposals on LHA to tenants in the private social rented sector, charities serving the homeless and landlords in your area.